PayPal Has a Crowdfunding Problem

paypalAfter freezing another start-up’s crowdfunded cash, PayPal is at a crossroads: Is the online payments company a friend or foe of crowdfunding?

Late Wednesday evening, the founders behind Mailpile, a privacy-centric email client that’s already raised north of $130,000 on Indiegogo, received a message no crowdfunder wants to hear: PayPal had frozen about one-third of the funds in their account.

The company’s co-founder writes:

Afer four phone calls, the last of which I spoke to a supervisor, the understanding I have come to is, unless Mailpile provides PayPal with a detailed budgetary breakdown of how we plan to use the donations from our crowdfunding campaign they will not release the block on my account for one year until we have shipped a 1.0 version of our product…

This puts us in an incredibly uncomfortable position as we do not feel that it’s remotely in their jurisdiction to ask for a detailed budget of our business, any more than it is within our right to ask for theirs.

Mailpile is hardly the first campaign (or small business, for that matter) to suffer from PayPal’s seemingly draconian policies directed against crowdfunders.

Read more at Inc.

Sponsored Links by DQ Promote

Send this to a friend